Brussels presents emergency measures to curb energy prices and prepares for a difficult winter
The European Union is preparing to face a difficult winter. However, with the reduction of gas supply by Russia, everything indicates that the next heating season, that of 2023, will be even more complicated. With this in mind, the European Commission has proposed this Tuesday new measures to curb the price of gas and wants to force the Member States to buy 15% of the gas necessary to replenish their reserves jointly. This proposal will be discussed at the leaders’ summit this Thursday and Friday in Brussels
This initiative wants to add the demand of European countries to reduce the high price of energy and avoid competition between them, favoring smaller countries. The joint gas purchasing platform was created in June, but has not yet become operational. The idea of establishing a minimum of 15% – which represents some 13,500 million cubic meters of gas – is “a sufficient amount to secure supply and, at the same time, ensure that we do not put all our eggs in the same basket” , explained an official European source.
At the same time, Brussels proposes to the Twenty-seven to create a temporary tool to correct the volatility of the gas market. Meanwhile, work will be done on the creation of a new reference index that reflects the price of liquefied natural gas (LNG) and which will come into operation in March. Currently, the European benchmark – the Dutch TTF, which sets the price of gas that arrives by pipeline – is driving energy prices even higher. “With the reduction of the gas that reaches Europe through pipelines, its price has skyrocketed,” the same sources say.
The extension of the ‘Iberian exception’ is not included in this package of emergency measures, since the European Commission must “analyze all the risks” of adopting a mechanism of this type. The proposal to cap the gas used in electricity generation has been hovering over the European negotiating tables for months and more and more countries are defending such a measure. Moreover, fifteen countries – including Spain – have asked the Commission to impose a limit on all gas imported into the EU.
In parallel, the bloc prepares for an emergency situation. If necessary, if there is a gas shortage or serious supply disruptions occur, two Member States could activate the European state of emergency. “That is where the solidarity mechanisms would come into operation, which would distribute the stored gas among the European countries.”
The European Commission assumes that, in the event of supply cuts, the countries of Eastern and Central Europe would be the most affected, as they do not have alternative supply routes. Currently, however, there are only six agreements of this type, so Brussels is trying to advance a framework agreement at European level, which would set the bases for collaboration between EU countries -how much gas to contribute, how and at what price- .
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